European leaders persuaded bondholders to take 50 percent losses on Greek debt and boosted the firepower of the rescue fund to 1 trillion euros ($1.4 trillion), responding to global pressure to step up the fight against the financial crisis.
Ten hours of brinkmanship at the second crisis summit in four days delivered measures that the euro area’s stewards said point the way out of the debt quagmire, even if key details are lacking. Last-ditch talks with bank representatives led to the debt-relief accord, in an effort to quarantine Greece and prevent speculation against Italy and France from ravaging the euro zone and wreaking global economic havoc.
“The world’s attention was on these talks today,” German Chancellor Angela Merkel told reporters in Brussels at about 4:15 a.m. today. “We Europeans showed tonight that we reached the right conclusions.”
Measures include a bigger role for the International Monetary Fund, a commitment from Italy to do more to reduce its debt and a signal from leaders that the European Central Bank will maintain bond purchases in the secondary market.
The euro rose and stocks advanced in Asian trading, with the currency advancing 0.5 percent to $1.3975 as of 11:31 a.m. in Tokyo. The MSCI Asia Pacific Index of shares gained 1 percent, and futures contracts on the U.S. Standard & Poor’s 500 Index increased 1.1 percent.
Pressing Banks
Europe’s leaders took the unusual step of summoning the banks’ representative, Managing Director Charles Dallara of the Institute of International Finance, into the summit to break the deadlock over how to cut Greece’s debt to 120 percent of gross domestic product by 2020.
Dallara squared off with a group led by German Chancellor Angela Merkel around midnight after issuing an e-mailed statement that “there is no agreement on any element of a deal.”
ECB President Jean-Claude Trichet, who has warned against the spillover effects of bond writedowns on the banking system, didn’t take part in the confrontation with Dallara.
Leaders backed two ways of leveraging up the 440 billion- euro rescue fund, which was designed last year to shield smaller countries such as Greece, Ireland and Portugal, and lacks the heft to protect Italy, the euro area’s third-largest economy.
While the mechanics have yet to be worked out, European Union President Herman Van Rompuy said the leverage effect would multiply the power of the fund by a factor of four to five.
To contact the reporters on this story: James G. Neuger in Brussels at jneuger@bloomberg.netHelene Fouquet in Brussels at hfouquet1@bloomberg.net
To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net
댓글 없음:
댓글 쓰기